27 replies to this topic

[DrBubb]

(not overly dramatic, I hope -

The former "Master of the Universe" :
WHERE does he go next ??  Will he build a business or ruin another economy?
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A man carrying a box leaves the Lehman Brothers European HQ building in Canary Wharf London, on September 15 2008. US investment giant Lehman Brothers filed for bankruptcy protection in the early hours of the morning after frenzied rescue attempts failed



At the heart of the credit crisis are toxic financial instruments known as collateralised debt obligations, based on high-risk US sub-prime mortgage loans. Before they unravelled, they fuelled easy credit and economic growth in many developed economies. Britons amassed a record £1.4tn of debts as banks loosened their lending criteria


Nearly every bank results announcement brings fresh mortgage-related losses. The world’s largest banks have written down a combined $274bn of assets, linked to sub-prime mortgages. The list is topped by Citi with $47bn of write-downs, closely followed by Merrill Lynch and UBS

/see: http://www.guardian.co.uk/business/gallery...cture=337623411

= = =

DOUG NOLAND and Jim Puplave talk about how we got into the mess:

Doug Noland
Market Strategist, David Tice & Associates

Topic:
Update on the current credit crisis ~ worse than expected
http://www.netcastdaily.com/broadcast/fsn2008-0927-2.asx

[DrBubb]

..
LESSon : Debt moves up after the stock peak, and then the system implodes

Here is the next big problem; Joblessness (and not only bankers)


US Oil production peaked in the Seventies

... and Global production about 1-2 years ago

To crawl out of the Second Depression, we need and economy less depend on foreign capital and foreign oil

What an equity crash looks like:
..

[DrBubb]

(I couldnt resist adding this article- about Bernanke's idea on how to stop a depression):

Bernanke Finds Lessons in the Great Depression:

Commentary by Caroline Baum


Aug. 17 (Bloomberg) -- Ben Bernanke is a self-described Great Depression buff, which is a good prerequisite for his current line of work as chairman of the Federal Reserve.

Whether the Fed was primarily responsible for the severe and sustained economic contraction of the 1930s, as asserted by economists Milton Friedman and Anna Schwartz, or just bears partial responsibility, is still a subject of lively debate among economic historians almost 80 years after the fact.

Bernanke, for one, wasn't satisfied that the Friedman- Schwartz analysis -- with causation running from a contraction in the money supply to falling prices and output -- completely explained ``the financial sector-aggregate output connection,'' as he wrote in a 1983 paper for the National Bureau of Economic Research (``Nonmonetary Effects of the Financial Crisis in the Propagation of the Great Depression'').

Instead, he theorized that ``the financial crisis of 1930- 33 affected the macroeconomy by reducing the quality of certain financial services, primarily credit intermediation.''

Translation: Many commercial banks, considered efficient at allocating credit (they have a knack for differentiating ``good'' from ``bad'' credits), failed. The ones that remained solvent wanted to hold liquid assets or, if they were willing to make loans, charged a higher rate of interest.

Then and Now

``It was reported that the extraordinary rate of default on residential mortgages forced banks and life insurance companies to 'practically stop making mortgage loans, except for renewals,''' Bernanke said, citing the work of the late economist A.G. Hart.

Sound familiar? The rate of default isn't extraordinary just yet, but the mortgage market is contracting in leaps and bounds, starting with originations and ending with securitizations. The tentacles of the home-loan market are starting to strangle portions of the debt, equity and even the normally staid money market.

Bernanke is fully sensitized to the collateral damage damaged collateral can cause. Over and over in speeches during his stint as Fed governor from 2002 to 2005, he returned to the subject of the Great Depression, detailing where the Fed went wrong and what the Fed could have done to ameliorate the problems of the banks (provide liquidity or lower interest rates).

/more: http://www.bloomberg.com/apps/news?pid=206...=columnist_baum

[romans holiday]

Remember reading a while back some articles... now lost deep in the archives of GEI somewhere... how Bernanke fails to see the credit expansion of the over-inflated twenties as the prime cause of the depression.  Rather, he just sees a central bank not reflating quickly enough.  Yet even this story an inactive central bank has been questioned... and commentators such as Murray Rothbard have pointed out that the bank did indeed try to inflate but to no avail.

I really do wonder if Bernanke has the word "bubble" in his vocabulary.

http://kr.youtube.com/watch?v=TCNKq0-9p3w

[nicejim]

[Steve Netwriter]

[No6]

Do these Time Magazine covers look familiar?  



They are all from 1973 -74.  Feb 73, Falling Dollar : Jun 73, Dollar Crashing : Oct 73, The Land Boom : War in Middle East : Jan 74, Energy Crunch : Oct 74, Fighting Inflation, Recession, Oil.

1973 the Dow hit a new high.  1 year later it had lost 50% of its value.  If history repeats or rhymes, we could be looking at Dow 7-8000, unless we get the great reflation.

[SoylentGreen]

that's so spooky, 35 years, 1 off the Harrison double cycle.

[dom]

[No6]

'Car sleepers' the new US homeless



This new phenomenon of middle-class homelessness is hard to quantify, but New Beginnings, an organisation that runs the car park sleeping scheme in Santa Barbara, says they accommodate some 55 people in a dozen parking lots.

Outreach worker Nancy Kapp, once homeless herself, says there is a waiting list for car park spaces and she is getting more and more calls each day from people about to lose their homes.

She identifies it as a new breed of homeless emerging in America.

'American nightmare'

"Being poor is like this cancer, and now this cancer is filtering up to the middle-class," she says. "I don't care how strong you are, it's a breakdown of the human psyche when you start to lose everything you have."

"These people have worked their whole lives to have a house and now it's crumbling and it's in ashes and how devastating is that?" she says.

"It's not an American dream, it's an American nightmare."

http://news.bbc.co.uk/1/hi/world/americas/7585696.stm

[DrBubb]

Sleeping IN THEIR CARS.
It seems that they will lose the home (that they couldnt afford) and get stuck with the car.
It would have been better to buy something they could afford, and give up the car.  Too late now for many.

..



Chat: http://kunstlercast.com/forum/index.php?topic=563.0

[DrBubb]

Homeless chic\que ?



British actor Sacha Baron Cohen (L) appears on the catwalk during the Agatha Ruiz De La Prada Spring/Summer 2009 women's collection during Milan Fashion Week September 26, 2008. Baron Cohen, best known for his eccentric character Borat, burst onto the catwalk at Agatha Ruiz De La Prada's show in Milan, bringing it to a halt as security guards stepped in.  

/see: http://www.reuters.com/news/pictures/slide...=24%20Hours#a=1

[DrBubb]

Ron Paul - "The Risk would be less"... if we did nothing

"We are back in a period like the Great Depression"

Ron Paul on Fox Business News
http://www.youtube.com/watch?v=TlgByE1jDRA

Congressman Ron Paul Schools Bernanke on the Bailout Plan
http://www.youtube.com/watch?v=dv6rQ0U01Yc&NR=1

"The never talk about the malinvestment of the 20's that caused the Great Depression."

....
Making BB cry...
"I’ve come up with a simple 5-step plan to make Ben Bernanke cry. You almost did it the other day. I’m hoping this will get us across the finish line."

Step 1) Show graph (a) and ask Dr. Bernanke if it appears correct:


/MORE: http://www.bullnotbull.com/bull/node/60

[Pluto]

[DrBubb]

(Who was that masked man  anyway?)


The proposal's defeat was also cheered on by a number of blogs that in recent days have posted links to lawmakers' telephone and fax numbers and urged citizens to oppose the plan. They included stopthehousingbailout.com, a Web site organized by a 37-year-old Los Angeles attorney named Morgan Ward Doran, and globaleconomicanalysis.blogspot.com, run by Mike Shedlock, an investment adviser at SitkaPacific Capital Management. Mr. Shedlock said in an interview Monday that his site had received 1.7 million page hits this month, which he said was half a million more than normal.

On his Web site, Mr. Shedlock has derided the proposed rescue as "a rush to judgment" that would benefit "high-flying financiers who chased big profits through reckless investments," and as "a complete waste of $700 billion."

"A number of people emailed me to say this was the first time that they've written, faxed or phoned their member of Congress," said Mr. Shedlock, a 55-year-old resident of Prairie Grove, Ill. "Were going to phone and fax every member of Congress who voted against this to thank them. ... Everyone who voted to pass this bill, we're going to actively organize to oust them."

/see: http://globaleconomicanalysis.blogspot.com/

[THEBIGMAN]

.

[burbelly]

http://www.myconfinedspace.com/wp-content/...ufackersuo1.jpg

[wren]

http://www.myconfinedspace.com/wp-content/...ufackersuo1.jpg

I was thinking of posting that one. Things are getting mean.

[Steve Netwriter]

http://www.guardian.co.uk/business/2008/oc...nking.economics

There's gold in them thar' shops: the rush is on

Tucked away beside the ornate entrance of the Savoy hotel in London are the discreet premises of ATS Bullion. Over the last few days staff there have witnessed an unprecedented phenomenon: queues.

The customers are wary savers looking to build their own solution to the global financial crisis and the parlous state of the banking system. They are buying gold.

[warpig]

Some good pics here. (10 days that shook Wall Street)